TaxTMI 
TaxTMI 
2018 (6) TMI 1860
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....e that order dated 29.12.2010 was passed under sections 143(3)/147 of the Act at a total income of Rs.59,07,149/-, wherein an addition of Rs.59,80,000/- was made on account of unexplained cash credits in the form of share application money received during financial year 2002-03, invoking the provisions of section 68 of the Act, in respect of the following parties: Name of share applicants Share application money received J SINGH TRADING & INVESTMENT PVT. LTD. 500,000 300,000 MODI ROAD LINES PVT, LTD. 300,000 VIKAS TAYAL 200,000 PERFORMANCE TRADING & INVESTMENT PVT. LTD. 500,000 H.V. TRADERS PVT. LTD. 400,000 ABM ALUMINIUM INDUSTRIES PVT. LTD. 250,000 ADISH JAIN 300,000 ATUL GUPTA 300,000 RAHUL FINLEASE PVT. LTD. , 500,000 JAIBHAGWAN 200,000 SWASTIC LEASE FIN (P) LTD. 550,000 DHARMENDRA SHARMA 100,000 LEENA GUPTA 300,000 GARG FINVEST PVT. LTD. 500,000 LATE VIDHYA RANI VIJ 40,000 REETA VIJ 190,000 ONKARNATH VIJ 300,000 RUCHIKA VIJ 230,000 Total 59,80,000 3. The assessee's appeal was dismissed by the ld. CIT(A). The ITAT, vide its order in ITA No. 326/AGR/2....
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....n (supra), and answering the undernoted question of law which was based upon the aforesaid decision of Hon'ble Apex Court, has held as under:- "whether, on the facts and in the circumstances of the case, and on a correct interpretation of section 68 of the Income-tax Act, 1961, the Tribunal was right in holding that the unexplained cash credits amounting to Rs. 8,100 appearing within one month of the commencement of the business in the books maintained for the previous year relevant to the assessment year 1963-64 were not taxable as the income of the assessee of the said previous year?" The assessee is a firm. The assessee commenced business on 27th November, 1961. The assessment year is 1963-64, for which the previous year ended on 27th October, 1962. In the course of the assessment proceedings, the ITO found certain cash credits appearing in the books of the assessee. The explanation offered by the assessee was not accepted by the ITO. He, therefore, added these cash credits in the assessment. , The assessee filed an appeal. The AAC found that the ITO made a mistake in the addition of those amounts and he, therefore, corrected the amount. A....
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....he Calcutta High Court after considering the judgment of Apex Court in the case of M/s Bharat Engineering and Construction Company (supra) found that the judgment of the Apex-Court was rendered in the context of Income Tax Act 1922. After introduction of Sec. 68 of the IT Act 1961, even in a case where an amount is credited on the very first day of the accounting year and the explanation offered by the assessee is not accepted, the amount may be assessed as income of the assessee during the accounting year for which the books of accounts are maintained. In view of the judgment of Calcutta High Court, in our opinion, the judgment of the Apex Court in the case of M/s Bharat Engineering and Construction Company (supra), may not be of any assistance to the assessee. Moreover, a Coordinate Bench of this Tribunal elaborately considered this issue and found that in the absence of any explanation, addition may be sustained u/s 68 of the IT Act, even though the assessment year is the very first year. In view of the above, we do not find any merit in the contentions of the assessee's counsel. Accordingly we confirm the order of the CIT(A)." 6.4 Thus from the above decisions of H....
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....firmed. Accordingly, the addition of Rs. 59,80,000/- as made by the AO u/s 68 of the Act is hereby confirmed. As a result, the Ground Nos. 2 & 3 of assessee are dismissed." 8. It is patent on record and not disputed that the assessee started its business operations from 28.02.2003. All the share application money, undisputedly, was received before this date. Question is whether it can be treated as unexplained. In 'CIT vs. Bharat Engineering Construction Company', 83 ITR 187 (SC) (supra) also, as in the present case, the amounts were received before the commencement of the business. The Hon'ble Supreme Court held that as such, they could not be added as the assessee's income. 9. In 'CIT vs. Ashok Timber Industries', 125 ITR 336 (Cal.), relied on by the ld. CIT(A), the amounts were received within one month of the commencement of the business. 10. In 'Shri B. Srinivasulu vs. ITO', order dated 04.06.2010, passed by the Hyderabad Tribunal in ITA No.647/Hyd/2009, for A.Y. 2005-06, again, the amounts were received post the commencement of the business. 11. Reliance by the ld. CIT(A) on these decisions is, therefore, mis-conceived. 12. In the following decisions, amongst o....